Misconduct is a broad term that covers all behaviour that you, as an employer, consider to be unacceptable. The scope of misconduct ranges from reasonably minor infringements such as persistent lateness, through to gross misconduct such as theft or violence. Examples of what you consider to be misconduct should be given in your Employee Handbook, together with the possible consequences of such behaviour.
How you deal with misconduct varies, but should be reasonable and consistent according to the severity of the offence. Minor misconduct, or one-off occurrences can often most effectively be dealt with informally, achieving the desired results. More serious offences may justify disciplinary procedures, with the most serious misconduct possibly resulting in dismissal.
Even in cases of gross misconduct, you still need to carry out a fair and reasonable investigation and give the employee chance to comment. Firing someone on-the-spot for gross misconduct is ill-advised without carrying out fair dismissal procedures.